Sunday, 29 July 2012

Act does not provide exemption on application of income outside India

NASSCOM in DIT v. NASSCOM (2012) 345ITR 362 having incurred an expenditure of over Rs.2 crores on events /activities held in connection with the exhibition in Hanover, Germany claimed such amount as an application of income and further therefore sought exemption u/s section 11 (1) (a) which was declined by the Delhi High Court pointing that exemptions on charity are possible for expenditure incurred in India for charitable purposes.

In a show of judicial restraint the High Court refused to unsettle the law despite assessee’s demand for a fresh look at the section having regard to the globalization of commerce and the vast strides in cross-border trade and flight of capital. The Court did not buy the idea of bold or innovative approach and instead used the judicial restraint to distant themselves from the matters of policy

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